The government of the Netherlands, in an effort to revive the Dutch housing market while buffeting the nation's banks against further economic woes, is reviewing the possibility of creating a national mortgage bank.
The Wall Street Journal reports that Dutch banks currently hold $848 billion in mortgage debt on their books, and the nation fell into recession during the fourth quarter of last year. A government-appointed commission is offering a plan that will enable banks to package some of their safest home-loans and move them to a new entity called the National Mortgage Institute.
Finance Minister Jeroen Dijsselbloem supports this strategy and insists it will allow banks to increase lending. ‘It would be very important for the Dutch economy,’ he says.
Dijsselbloem adds that the new entity will be self-financing and will issue standardized bonds that are 100% guaranteed by the Dutch government.